CONSUMER CONFIDENCE UP!

  • EM Quantum Technology
One of the most analyzed indices used by financial consultants and economic forecasters is the Consumer Confidence Index. The CCI measures people’s optimism in the state of the economy and forecasts saving and consumer activity in the US. The index comes out monthly and is based on two ratios: 40% on current outlook and 60% on future outlook. The Conference Board is an independent economic research organization. Its monthly Consumer Confidence Survey is conducted by Nielsen, which canvasses 5,000 US households. The survey consists of five questions that ask the respondents' opinions about the following:
  - Current business conditions
- Business conditions for the next six months
- Current employment conditions
- Employment conditions for the next six months
- Total family income for the next six months
  In February, the Present Situation Index rose from 130.0 to 133.4 and the Expectations Index rose from 99.3 in January to 102.4. These combine to a February CCI of 114.8%, up from 111.6% in January. This is the highest level since July 2001, which was 116.3%. This indicates that there is a very optimistic view of the economy, and an expectation that businesses will add new employees and expand their operations over the next 6 months. New companies and capital formation are in fact expanding rapidly; the economic climate is healthy and conditions are ripe.